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Registered number: 02447811
Metro Mechanical Services Limited
Annual report and financial statements
For the year ended 31 March 2019
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Metro Mechanical Services Limited
Company Information
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N Gaisman (appointed 16 July 2018)
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M Marks (appointed 16 July 2018)
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M White (resigned 16 July 2018)
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Unit A3 Lion Business Park
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Chartered Accountants & Statutory Auditor
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Page 1
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Metro Mechanical Services Limited
Contents
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Directors' responsibilities statement
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Independent auditors' report
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Statement of income and retained earnings
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Notes to the financial statements
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Metro Mechanical Services Limited
Strategic report
For the year ended 31 March 2019
The directors present their strategic report for the year ended 31 March 2019.
The Company’s strategy is to be the first choice nationwide for commercial drainage. This strategy consists of several key components: promoting a gold standard of health and safety; delivering exceptional customer service; offering technical expertise in its areas of specialism; and providing rewarding careers for its employees.
During the period under review, the Company continued to implement its strategy successfully. Despite macroeconomic and political uncertainty in the broader business environment, the Company saw increased revenue for the period compared to the prior year. The Company also undertook several investment initiatives with the aim of enhancing productivity and customer service.
The Company considers its Key Performance Indicators to be gross profit growth, earnings before interest, tax, depreciation and amortisation (EBITDA) margin, and revenue per employee. The Directors are satisfied with the performance against these KPIs, although they believe there is scope for improvement in future periods.
Principal risks and uncertainties
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Health & Safety: the work that the Company carries out frequently presents health and safety hazards to its employees and members of the public. These risks include those related to vehicle safety, manual handling, slips, trips and falls, work at height, hazardous material, confined spaces, and the operation of machinery. The Company takes these risks extremely seriously and has an accredited safety management system compliant with OHSAS 18001, as well as a formal review of health and safety at each board meeting.
Team: the performance of the business is driven by the successful recruitment and retention of high-quality engineers and support staff. The business has continued to add to its employee base and has experienced a reduction in turnover in employees. There is ongoing investing in recruitment and retention for the future. The directors continue to monitor this as a strategic priority.
Regulatory: failure to comply with existing regulation poses a serious risk. The Company’s ISO 9001 audits focus on ensuring compliance with existing regulations. The Company actively monitors potential changes in legislation (for example, changes to waste transfer regulations; changes to the regulated remit of the utility and water sector; changes to employment law; or changes to transport regulations).
Financial: principal financial risks include credit risk and liquidity risk. The Company carries out credit checks on new and existing customers. The Company has historically experienced minimal bad debts, although it continues to invest in improvements to its credit process. Liquidity risk arises from an inability to meet short or long-term financial obligations or to carry out strategic investments. The Company currently has low liquidity risk on account of its financial performance and cash position.
Page 3
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Metro Mechanical Services Limited
Strategic report (continued)
For the year ended 31 March 2019
Principal risks and uncertainties continued...
Cyber: the Company is reliant on IT infrastructure to carry out its essential service tasks (including job management, client communications and invoicing). The risk of a cyber-attack has been mitigated by investment in the Company’s security infrastructure to ensure that robust protections are in place across its networks. The continued improvement of technology across the Company’s operations is a strategic priority.
Key Customers: the Company has long-term relationship with a number of key customers. These relationships may be terminated without cause or on written notice. Although the Company knows of no reason why such contracts would be terminated or would not be renewed, the Directors cannot guarantee that the relevant parties’ commercial position or market conditions will not alter their position. The loss of these customers could have a material adverse effect on the financial position and future prospects of the Company.
This report was approved by the board on 20 December 2019 and signed on its behalf.
Page 4
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Metro Mechanical Services Limited
Directors' report
For the year ended 31 March 2019
The directors present their report and the financial statements for the year ended 31 March 2019.
The profit for the year before the exceptional intercompany loan write off was £1,167,594 (2018 - profit £993,400). When factoring in the intercompany loan write off the loss for the year was £1,832,406.
A dividend of £480,000 was paid during the year (2018 - £60,000). The directors do not recommend the payment of a final dividend for the period ended 31 March 2019.
The directors who served during the year were:
N Gaisman (appointed 16 July 2018)
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M Marks (appointed 16 July 2018)
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M White (resigned 16 July 2018)
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The directors aim to maintain the current levels of activity, seeking new business in the prescribed field of expertise, with a view to future growth of the company.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Company since the year end.
The auditors, Kreston Reeves LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 20 December 2019 and signed on its behalf.
Page 5
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Metro Mechanical Services Limited
Directors' responsibilities statement
For the year ended 31 March 2019
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Page 6
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Metro Mechanical Services Limited
Independent auditors' report to the shareholders of Metro Mechanical Services Limited
We have audited the financial statements of Metro Mechanical Services Limited (the 'Company') for the year ended 31 March 2019, which comprise the Statement of income and retained earnings, the Balance sheet and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 March 2019 and of its loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
Page 7
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Metro Mechanical Services Limited
Independent auditors' report to the shareholders of Metro Mechanical Services Limited (continued)
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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As explained more fully in the Directors' responsibilities statement on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Page 8
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Metro Mechanical Services Limited
Independent auditors' report to the shareholders of Metro Mechanical Services Limited (continued)
Auditors' responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Page 9
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Metro Mechanical Services Limited
Independent auditors' report to the shareholders of Metro Mechanical Services Limited (continued)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Samantha Rouse FCCA DChA (Senior statutory auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
Canterbury
20 December 2019
Page 10
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Metro Mechanical Services Limited
Statement of income and retained earnings
For the year ended 31 March 2019
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Amounts written off investments
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Interest receivable and similar income
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Interest payable and expenses
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- correction of a prior period error
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At the beginning of the year as restated
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(Loss)/profit for the year
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Dividends declared and paid
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Retained earnings at the end of the year
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The notes on pages 13 to 27 form part of these financial statements.
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Page 11
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Metro Mechanical Services Limited
Registered number: 02447811
Balance sheet
As at 31 March 2019
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 20 December 2019.
The notes on pages 13 to 27 form part of these financial statements.
Page 12
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
The Company is a private limited company incorporated in England and Wales. The registered office is Unit A3 Lion Business Park, Dering Way, Gravesend, Kent, DA12 2DN. The Company's registered number is 02447811.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The financial statements are rounded to the nearest pound.
The functional currency of these financial statements is Pounds Sterling.
The Company has elected to apply all amendments to FRS 102, as set out in the triennial review published in December 2017, prior to the mandatory adoption for accounting periods beginning on or after 1 January 2019.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial reporting standard 102 - reduced disclosure exemptions
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The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Hillgate (1234) Ltd as at 31 March 2019 and these financial statements may be obtained from 37 St Margarets Street, Canterbury, Kent CT1 2TU.
Despite the losses made by the company during the year which has arisen due to the exceptional intercompany loan write off and therefore the directors considered the company to be a going concern.
Page 13
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
2.Accounting policies (continued)
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Rendering of services
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Where services have been provided to a customer but have not invoiced at the year end, the company recognises the proportion of revenue based on the labour hours incurred up to the year end. The associated revenue is recognised in the financial statements as accrued income.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the Statement of income and retained earnings on a straight line basis over the lease term.
Interest income is recognised in the Statement of income and retained earnings using the effective interest method.
Finance costs are charged to the Statement of income and retained earnings over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in the Statement of income and retained earnings in the year in which they are incurred.
Page 14
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in the Statement of income and retained earnings when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in the Statement of income and retained earnings, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of income and retained earnings over its useful economic life.
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Page 15
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of income and retained earnings.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 16
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of income and retained earnings in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of income and retained earnings.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Page 17
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following judgements have had the most significant impact on amounts recognised in the financial statements:
Lease commitments
The company has entered into a range of lease commitments in respect of property, plant and equipment. The classification of these leases as either financial or operating leases requires the directors to consider whether the terms and conditions of each lease are such that the company has acquired the risks and rewards associated with the ownership of the underlying assets.
Tangible fixed assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 15 for the carrying amount of the property, plant and equipment, and note 2.11 for the useful economic lives for each class of assets.
The whole of the turnover is attributable to the business activity of the company.
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All turnover arose within the United Kingdom.
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The operating profit is stated after charging:
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Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
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Page 18
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 1 director (2018 - 1) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £232,483 (2018 - £213,452).
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The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £6,000 (2018 - £5,900).
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Page 19
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
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Interest payable and similar expenses
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Current tax on profits for the year
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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Page 20
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2018 - lower than) the standard rate of corporation tax in the UK of 19% (2018 - 19%). The differences are explained below:
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(Loss)/profit on ordinary activities before tax
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(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2018 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the year
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In the current year, £190,172 (2018: £Nil) of the UK corporation tax charge relates to a payment to Hillgate (1234) Ltd for losses surrendered by way of group relief.
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
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Dividends on ordinary shares
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Page 21
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
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Intercompany loan write off
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The exceptional administrative expenditure represents the profit and loss impact of the write off of an intercompany loan.
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Page 22
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
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Long-term leasehold property
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Charge for the year on owned assets
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Charge for the year on financed assets
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Raw materials and consumables
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Page 23
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Page 24
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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All loans and hire purchase agreements are repayable within 5 years of the balance sheet date.
All loans and hire purchase agreements with HSBC Plc are secured by a fixed and floating charge over the assets of the company.
Mark David White and Julie Ann White have a fixed and floating charge of the property of the company, in relation to the liabilities in Hillgate (1234) Limited the parent undertaking.
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Charged to the profit or loss
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The deferred tax asset is made up as follows:
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Accelerated capital allowances
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On 16 July 2018, the 95 ordinary shares and the 5 EMI ordinary shares of £1.00 each in the issued share capital of the Company were sub-divided into 950 ordinary A shares of £0.10 each and 50 ordinary B shares of £0.10 each.
Page 25
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
Capital redemption reserve
The capital redemption reserve represents the value of redeemed shares in prior periods.
Profit and loss account
The profit and loss reserve represents accumulated comprehensive income for the current and prior periods.
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Two prior year adjustments have been recognised in relation to the income of the company.
The first adjustment has arisen as it was identified that income had not been correctly recognised in prior years due to a miscalculation of accrued income. The error in the 2018 results has arisen due to the incorrect closing balance in the audited financial statements for the year ended 31 March 2017 and the error in the 2019 results is due to the incorrect closing balance in the audited financial statements for the year ended 31 March 2018.
The second adjustment has arisen as it was identified that income had not been correctly recognised due to a miscalculation of deferred income.
Due to the material nature of the errors, the financial statements have been adjusted accordingly.
The impact of this adjustment recognises the following:
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Prior period adjustment 1
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Corporation tax repayable/(payable)
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Prior period adjustment 2
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Corporation tax repayable/(payable)
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The company pays into defined contribution personal pension plans held by certain employees and the contributions payable during the year amounts to £116,538 (2018: £77,647). At the year end there were contributions outstanding of £47,018 (2018: £34,295).
Page 26
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Metro Mechanical Services Limited
Notes to the financial statements
For the year ended 31 March 2019
|
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Commitments under operating leases
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At 31 March 2019 the Company had future minimum lease payments under non-cancellable operating leases as follows:
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Later than 1 year and not later than 5 years
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Related party transactions
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Remuneration paid to close family of the directors
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Dividends paid to directors
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Purchases from close family of the directors
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Amount due to close family of the directors
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Dividends paid to parent company
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Intercompany loan write off
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Metro Mechanical Services Limited became a subsidiary of Hillgate (1234) Ltd from 16 July 2018, a company incorporated in England and Wales.
Metro Mechanical Services Limited are included in the consolidated financial statements of Hillgate (1234) Ltd which are available from 37 St Margaret's Street, Canterbury, Kent, CT1 2TU.
Page 27
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